Is the need for affordable housing creating new markets?

[Cory J Thornton]

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

[Jay Hinrichs]

Quote from @Carlos Ptriawan:

Quote from @Cory J Thornton:

I have been thinking through housing, affordability, and the effect on what until the last few years have been dead markets. Any home with a decent commute to a decent market is not affordable. 

Over the last few years, and even now, I am seeing investors put their capital to work in areas that locals have previously ignored. 

It begs the question, in order to afford a rent, afford an investment property, or a primary home, will price start pushing people to forget the first three rules of Real Estate (location, location, location)? 

As a local example, a recent study showing the migration patterns of folks leaving Raleigh, the #6 city most likely to pick up those residents was Rocky Mount NC. Five years ago, this was not the case and even three years ago people were still highly suspect of that area (myself included). Now I'm starting to see people push much further out to 3-4 layers away from primary job markets completely sacrificing location for cost of ownership or cost of living. 

What do y'all think?

Is this something anyone else is noticing and if it is a trend, is there anything that will make it a short lived thing or is it going to continue longer term?

 This is very common.
Lets say suburban purchased 50 miles radius outside of city center. Milleneal would purchase 75mile radius, rand 75-150 miles are areas where it's bought by genz. because of the disparity in buying power, people is buying even further and further away. That's good area to invest.

CA is the poster child for this.. Myself growing up in Cupertino CA  ( SF Bay Area Apple headquarters ) no one starting out could afford a home there on average incomes.

So buyers spread out to places no one would have bought say 10 years before that.. East Palo Alto
Richmond  Vallejo  Livermore and beyond to the central Valley and 2 hour commutes.

for 70% of the country there is no affordability issue.. houses can be bought even todays interest rates for the same basic cost as rent..  

these cities all have housing that is on public Sewer Water and police protection and houses can be bought that are liveable ( not brand new ) for 100k to 200k

1. Detroit
2. Cleveland
3. Columbus/ Dayton
4. Baltimore city
5. Toledo
6. KC  both KS and MO
7. St. Louis
8. Milwaukee
9. Chicago
10. Smaller towns in S Carolina and N. Carolina
11. Many Parts of semi rural FLA.
12. Jackson MS
13. Birmingham AL
14. Memphis
15. Indy

Etc. Etc.

And any Midwestern city under 100k pop.. Now the question becomes where will buyers want to live the inventory is there its the buyers that are choosing the more expensive areas.. A lot of that has to do with Schools And other Social benefits and concerns.  Folks that have good credit and jobs they are picky so thats why your seeing new construction sell so well also.